After agreeing to provide the financially struggling Appalachian School of Law with a $3.4 million appropriation in February, the Buchanan County Board of Supervisors voted last week to ask for the money back.
Supervisors Tim Hess and Jeff Cooper said fellow supervisor Trey Adkins told the full board at the Nov. 2 meeting that the school appeared to be in better financial health than what was initially presented to the board, but documents obtained by Cardinal News paint a different picture. The agreement that lays out the appropriation also does not include a mechanism for the county to demand its return.
Questions about the school and the appropriation come amid ongoing discussions of a merger between the Grundy law school and the University of Pikeville, or UPike, a private liberal arts school just across the state line in Kentucky. The independent law school has entertained the idea of merging with another institution several times following years of financial challenges.
The board voted to request reimbursement of the money in a 6-1 vote, with supervisor Roger Rife voting against the action. “No,” Rife said, according to a recording of the meeting obtained by Cardinal News through a Freedom of Information Act request. “Because we were gung-ho to give it to them, and now we want it back?”
“Circumstances have changed. There’s been reckless spending. So I look forward to asking for the money back,” Adkins replied, and the vote proceeded.
The $3.4 million appropriation caused contention between supervisors and the county’s industrial development authority earlier this year, which some said led to the removal or resignation of several of the authority’s members who wanted more time to consider appropriating the money. Instead, the money was appropriated by the town of Grundy Industrial Development Authority in March.
Adkins, who also serves on the board of trustees for the law school, told Cardinal News in July that county officials had been told that the law school would shut down if the county didn’t provide the funding. So when the authority said it wanted more time to assess the school’s finances, supervisors worked out a deal with the Grundy IDA instead. Adkins said the county money had to be appropriated through the IDA as a conduit.
“We were pressed for time to bail the law school out to keep the doors from closing,” Adkins said.
Adkins did not respond to several requests for comment last week by phone and text.
Hess and Cooper said Adkins told the board the school didn’t need the money after all, with Cooper saying the school was and is in “better standing than they alluded to us.”
David Western, president and dean of the law school, said he was shocked to hear this.
“The county was never misled. They’ve had access to our financials for a very long time, and they recently were provided documentation to support the fact that the law school had need — and that the county graciously provided it,” he told Cardinal News by phone Thursday. “No one was ever misled in the process.”
Some of those documents included a June letter from the school’s accreditor, the American Bar Association, asking officials for more information about its financial resources following a regular audit.
The ABA regularly monitors approved law schools to ensure they remain in compliance with its standards for approval, particularly around fiscal information and student achievement, according to the letter dated June 16.
Stephanie Giggetts, deputy managing director of accreditation and legal education of the ABA, asked in the letter for specific information about “the steps the law school is taking to remain in compliance … in light of the one-year decrease in budget reserves from $4,558,735 in 2024 to $3,179,024 in 2025.”
The school’s response, Giggetts wrote, could determine whether the school remained in compliance with accreditation standards that require it to have enough financial resources to carry out its programming.
On July 14, Western responded to Giggetts, notifying her in a letter, also obtained by Cardinal News, that ASL possessed “more than $5.9 million in investments” thanks to the $3.4 million investment from Buchanan County and a $1 million gift from the Street Foundation, a philanthropic organization that has provided funding to several regional nonprofits in Buchanan County and the surrounding areas.
In a follow-up letter dated Sept. 1, Giggetts wrote that “based on the information provided, the Accreditation Council determined to take no further action at this time with respect to the Law School’s compliance with the Standards noted in the interim monitoring review letter.”
Status of reimbursement, merger remains unclear
The agreement between the Grundy IDA and the Appalachian School of Law includes a number of terms for the $3.4 million appropriation — referred to in the document as an “unrestricted grant” — including the law school’s agreement to maintain its campus in Grundy for 50 years, the establishment of a finance committee to review the school’s financial situation monthly, and a pledge that if the law school has any excess tuition revenue after three years, it will begin repaying the IDA.
Cardinal News obtained a copy of the agreement from publicly available meeting minutes. It was authenticated by Dennis Ramey, the IDA’s property manager.
The agreement does not include any provisions for the IDA or the county to ask for the money back.
Both Hess and Cooper said they are not sure whether the law school would return the money. They also said they were not aware whether the request is connected to the potential merger with UPike.
Western maintains that the school needed the financial assistance to remain afloat.
The other four supervisors — Rife, David Rose, Lee Dotson and Craig Stiltner — did not respond to emails and phone calls from Cardinal News requesting comment. County Administrator Craig Horn also did not respond to a request by email.
Adkins did say in July that he had reservations about a merger with the university.
“The board [of supervisors] has zero control in terms of the future of the law school. … We’re never going to simply give it away,” he said.
Adkins was appointed to the school’s board of trustees in January to replace supervisor Rife.
He is one of the up to nine members of the board appointed by the county board of supervisors. Another nine are appointed by the board of trustees itself, and the remaining seat on the board goes to the president of the school’s alumni association, according to the compact, or agreement, between the county, its IDA and the school when it was founded.
The school launched in 1994 with financial support from the county and its IDA, in part to boost the county’s economy and develop a pipeline of attorneys for the region.
In addition to laying out the donation of county property and $2.5 million in startup funding for the school, the compact also says that the school can’t move out of Grundy without approval from the board of supervisors.
As a member of the law school’s board of trustees, Adkins has a fiduciary duty to the school, which means he and the other trustees must manage institutional assets and make decisions in the best interest of the school rather than for personal or external gain.
Under state law, county supervisors must recuse themselves from voting on transactions where a supervisor has a personal interest, but are not immediately required when serving as a member of the board of trustees of a not-for-profit entity unless they have other personal interest in the entity. Supervisors can always voluntarily or abstain from votes to avoid the appearance of impropriety.
Ramey said Thursday that he has not heard from supervisors about the request. Because the county money was appropriated through the IDA, he said he thinks it would have to go back through the same channels.
“Until they talk to us or come to us with some sort of request, I really don’t know how our board will handle it,” Ramey said in a phone interview. “I can’t see the Grundy IDA going back to the law school and saying ‘Hey, we want that money back.’”
Ramey said he was also told the law school was financially struggling by supervisors, which is why the IDA board decided to appropriate the money initially.
“The agreement isn’t between Buchanan County and the law school. … It’s between the town of Grundy IDA and law school,” Ramey said.
The status of the potential merger also remains unclear. In May, Jerry Kilgore, chair of the ASL board of trustees and a former state attorney general, appointed a committee to explore a merger and talks between the law school, the university and a third party retained by UPike to help with negotiations have continued. Kilgore did not respond to a phone call this week from a reporter.
In an email Friday, Burton Webb, president of the University of Pikeville, said UPike officials are working to “schedule a meeting with the representatives from ASL and others to discuss our next steps” but do not have a date for the meeting yet.
Law school officials have indicated that the next steps include approval by both institutions’ accreditors: the American Bar Association, in ASL’s case, and the Southern Association of Colleges and Schools Commission on Colleges. Following approval, each institution’s board of trustees must take a final vote on a merger. The ASL board of trustees is scheduled to meet again in December.
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Source: cardinalnews.org
